LONDON, April 17 (Reuters) - Shares in Serono SA (SEOZ) and Schering
AG (SCHG) gained on Wednesday as new data gave the two rivals fresh ammunition
to fight Biogen Inc (BGEN) in an increasingly competitive market for multiple
sclerosis drugs.

Treating the disorder of the central nervous system is the subject of
a fierce drug-marketing battle, after Swiss-based Serono broke into the
United States last month by overturning the "orphan drug" status previously
enjoyed by Biogen's Avonex.

At stake is a market that analysts estimate could be worth $4 billion
by 2004.

Avonex alone already has sales of nearly $1 billion a year, mostly in
the United States, and Serono -- Europe's biggest biotechnology company
-- is gunning for a 25-percent share of American sales with its product
Rebif.

Schering, whose medicine Betaseron was the first of the interferon class
of drugs developed for MS, risks being left behind as Rebif and Avonex
slug it out. But a two-year study released at the annual meeting of the
American Academy of Neurology in Denver may revive its fortunes.

Shares in the German company rose 2.2 percent to 66.40 euros by 0900
GMT following the overnight news that patients taking Betaseron were 42
percent more likely to remain free of relapse than those on Avonex.

HIGHER DOSES

Andreas Schmidt, industry analyst at Merrill Lynch in Frankfurt, cautioned
investors against getting carried away by the Schering news, however. He
noted the study, involving fewer than 200 patients, was relatively small
and may have been slightly flawed in design.

As a result, he continues to expect flattish sales growth for Betaseron,
with a five-percent increase this year to 715 million euros ($629 million)
tailing off to zero growth by 2005.

Nonetheless, the latest Betaseron data adds to a growing body of evidence
showing that patients treated with higher doses of interferon, at more
frequent intervals, respond better than those treated with the lower-dose
regimen of Avonex.

In January the American Academy of Neurology issued guidelines supporting
the view that higher doses administered with greater frequency were more
effective than lower doses with lower frequency. This is a potentially
powerful marketing tool for Schering and for Serono, whose drug Rebif is
also delivered at higher doses than Avonex.

Shares in Serono gained 1.1 percent to 1,426 Swiss francs on the news
that 62 percent of patients taking Rebif remained relapse-free at the end
of 48 weeks, compared with 52 percent of patients taking Avonex.

In March, U.S. regulators approved Rebif saying it was clinically superior
to Avonex based on data from a six-month trial. Data from 12 months, released
in full at Denver, also showed Rebif to be superior, but the gap between
the two drugs narrowed in the second six months.

In a bid to prove the gap could disappear entirely over time, Biogen
plans to launch a five-year head-to-head study comparing Avonex with Rebif.
For Biogen the stakes are particularly high, since Avonex is its only marketed
product.

(Additional reporting by Toni Clarke in New York and Alice Ratcliffe
in Zurich)